British Pound Heads Lower as US Dollar Pulls Back Recent Losses
- The British Pound still under downward pressure as Brexit looms.
The British Pound moved lower on ongoing Brexit worries Tuesday, while the US Dollar recouped some of its recent losses as investors wait for President-elect Donald Trump’s first press conference Wednesday. While Trump’s Twitter account has been active since he won the keys to the White House and given clues to his policies, tomorrow’s press conference will give Trump the platform to add more meat to the bones of his tax and spending plans.
EUR/USD traded back down below 1.0590 after hitting an overnight high of 1.0627 and remains close to January’s 1.0338 low. A break below this could take the pair back to levels last seen in early-2003.
Chart: EUR/USD 5-Minute Timeframe (January 9-10, 2017)
Across the pond, GBP/USD continues to probe the downside as PM Theresa May’s plans for Brexit come under increasing scrutiny. PM May, who has stated that Article 50 will be triggered by the end of March, is under pressure from the electorate to outline the government’s plans for leaving the EU. PM May and her negotiating team, however, are reluctant to give too much away ahead of the tricky divorce proceedings.
The UK currency continues to be dominated by political uncertainty despite recent data showing the UK economy seemingly in good health. The FTSE 100, aided by the weak currency, made a fresh record high in early trade, while the domestically-oriented FTSE 250 also traded in uncharted territory as equity investors shrug off Brexit fears and focus on the recent strong economic releases.
Chart: GBP/USD 5-Minute Timeframe (January 9-10, 2017)
--- Written by Nick Cawley, Analyst
To contact Nick, email him at Nicholas.firstname.lastname@example.org
Don't trade FX but want to learn more? Read the DailyFX Trading Guides
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.